Does The Citi "Payment Partner Program" Work?

By Ben PopkenOctober 7, 2008

For several years and in different forms, Citi has had an interesting idea to get you/help you to pay off your credit card called the Citi Payment Partner Program. How it works is if you enroll and make above the minimum payment due for four months, on-time, at the end they will match 10% of the amount you paid off above your minimum payment. The max cap is $550. But there are two important caveats:

1) They won’t let you charge anything on the account the whole time
2) They decrease your credit limit.

Specifically, they decrease your credit limit by the amount you pay over the minimum, plus the 10% they toss you.

Assuming you could get one, seems like doing a 0% balance transfer to another card would be a better option. But if you can’t get that and you’ve got a balance on your Citicard you need help with, it could work for you.

Have you tried the Citi Payment Program? Let us know how it went for you in the comments.

Looks like the goal is to bump the Citi card to the top of the “what should I pay off in my snowball” list, while simultaneously reducing Citi’s exposure to customers whose repayment is a matter of concern.

Only downside is that they’re taking down your credit limit, so your % of credit used doesn’t drop, which won’t help your credit rating. Still, if you’re indebted enough that Citi is willing to (effectively) take 90 cents on the dollar to get you to pay it down faster, I doubt that % of credit is the biggest issue on your credit rating.

The knock your credit limit down after the 4 months are up, so it’s not like you’re hitting a moving target.

The credit limit going down doesn’t matter much if you game it right — pay down the card to the point where the statement credit wipes out whatever balance you have left, and then close the thing altogether.

@jscott73: Discover offers the Motiva Card. The deal here is, “Each time you make 6 on-time payments in a row, get your next month’s interest back.” In addition you also get a Cashback Bonus for regular purchases, albeit quite a smaller bonus compared to their other cards they offer. Not as helpful as Citi in that they don’t really encourage you to fully pay off the card and not accumulate the debt again, but it’s still some motivation I guess.

I actually like this program. Free money is always a good thing, and 10% is a healthy enough margin to make it worth while. So what if your credit score isn’t going up a few points as your balance/limit ratio doesn’t change. Once the card is paid in full, it might end up helping your score more.

Obviously there are circumstances where it would adversely affect your score, but if you’re in debt and need to get out, an extra 10% could really help. For most, the incentive seems reasonable enough.

@dakotad555: But it’s not 10% of your balance, it’s 10% of what you pay over. Assuming you pay a lot over, you may see a 7-8% return. Not too shabby, but a 0% balance transfer could see up to 20% or 30% return depending on how crappy a card you have.

I actually might try this on my citibank card. While I’d much rather have the available balance available to help improve my “just graduated from college and moved across the country” credit score, at this point I’d really just like to get the card paid off. I already scanned both sides of the card and shredded it so that I can’t really use it, so as soon as I actually get a paycheck I might pay them and ask about enrolling in this program.

Looks like an okay deal. You’re right though that a 0% transfer would be better in a lot of cases. 10% off of a 20% card still leaves you paying 10% interest.

Also, it isn’t actually 10% off of your balance, it’s 10% of what you pay over your minimum. It’s also unclear what you’d get if you paid everything off in one month.

This is a good plan for Citi in that it reduces their outstanding credit, and it’s good for an average user. Certainly better than slashing limits without warning. An intelligent consumer can probably find a better deal, but then an intelligent consumer wouldn’t have thousands in credit card debt.

What happens to your credit report? Does this get reported as settled? What is stopping me from using my citicard raking up a balance then only paying 90% when I can convince Citi I’m in financial ruin?

This actually sounds both consumer friendly and fiscally responsible – and a great option for someone trying to pay down a hefty balance. I can’t see the credit limit decrease as a negative, if you’re truly trying to pay down a balance, why would you be upset about your limit going down?

The headline should read – ‘New Credit Card Program Does Not Try to Wallet-Rape Consumers’

But since lack of cash seems to be a problem in these times shouldn’t these companies just be rewarding you for paying above the minimum every month-it puts actual cash in their hands and not a potential value ie to be accumulated interest.

From the lender’s perspective I don’t see the logic, unless they are desperately in need of cash. The whole purpose behind issuing credit cards is to earn a return on money lent, which is the outstanding balance and receiving a piece of the merchant fee for booking the transaction.

The merchant fee isn’t a lot, but adds up as the card is used. When they suspend usage they lose future merchant fees. Giving back 10% or as they are doing now, 20% of the extra payment earns them a negative APR if the payments are substantial.

Banks are in business to earn a return not pay one out. A good strategy for the card holder may be to charge a big ticket item, enough to earn the maximum, sign up for the program, and them pay it off at the first billing after enrolling.

Citi’s stock is down 87% over the last 52 weeks as compared to the KBW Bank Index’s 71% loss.

I have a bad taste in my mouth from Citibank..Years ago I paid off $25, 000 in debt from my savings and they reduced my credit limit by that amount.At the time you could have earned a good return on that $25000 and used it for living !But they came out ahead!Now they offer this Program.., freezes your credit card and since I have certain bills automatically deducted each month , then pay , I have to do all the work to stop them and run the risk of either late fees or having my medications stopped and no credit card for an emergency!!So in effect they are trying to get you to not use Citicards!And search for another an impact one’s credit score!..I WANT TO COME BACK AS A BANKER NEXT LIFE!!

I’ll say this about Citi. I did this program about a year and a half ago and got the money as promised. Then just last month, I got an email that directed me to a site — paymentpartner.citicards.com — where I could enroll in the program. Make payments over a certain hurdle or something and you get money back. We’ll see if it actually works.